Economic-Survey 2014

Abstract

The macroeconomic stability witnessed in 2013 spilled into the first quarter of 2014 and is likely to continue to the rest of the year. In 2014, macroeconomic stability might be supported by a projected stable low inflation, moderate interest rates and a possible restraint in domestic government borrowing and thus create a conducive environment for improved economic growth. Private consumption is also likely to improve given the stable interest rates and low inflation regime. Manufacturing sector’s performance is projected to maintain its current growth path supported by increased private and public consumption. Similarly, the financial intermediation sector is likely to maintain its momentum in 2014 mainly on account of enhanced performance in most of the sectors and technological advances. World trade volume is projected to expand at 4.8 per cent in 2014 supported by an increase in global commodity demand and may therefore see Kenya’s exports register significant growth during the year. Similarly, the global economy is expected to post an enhanced growth of 3.7 per cent in 2014 and is therefore likely to impact positively on the economy, in particular, increased flows of external remittances, foreign investments and tourism earnings. Recent discoveries of petroleum oil, natural gas and other minerals are likely to trigger more foreign direct investment inflows. Investments in the construction industry is likely to remain robust against a background of stable interest rates coupled with the ongoing government infrastructural projects and the private sector’s resilient participation especially in the real estate development.